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Associated Estates Announces Partial Exercise Of Underwriters' Option To Purchase Additional Common Shares

CLEVELAND, July 2, 2013 /PRNewswire/ -- Associated Estates Realty Corporation (NYSE: AEC, NASDAQ: AEC) ("Associated Estates" or "the Company") today announced the partial exercise of the underwriters' option to purchase an additional 547,958 common shares in connection with the most recent underwritten public offering, which was conducted on a forward basis.

After giving effect to this partial option exercise, an aggregate of 7,047,958 common shares were sold pursuant to the forward sale agreement detailed below at a public offering price of $17.25 per share. Total net proceeds, after deducting the underwriting discount and estimated expenses, were approximately $116.2 million.

Associated Estates expects to use the net proceeds received from the forward equity sale to repay debt that is scheduled to mature on October 1, 2013 and for general corporate purposes.

Citigroup, BofA Merrill Lynch and Wells Fargo Securities served as joint book-running managers for the offering. Jefferies and Raymond James served as co-lead managers for the offering. Barclays, Cantor Fitzgerald & Co., Sandler O'Neill + Partners, L.P., Compass Point Research & Trading, LLC and RBS Securities Inc. served as co-managers for the offering.

In connection with the offering of its common shares, Associated Estates entered into forward sale agreements with Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, or their respective affiliates (which are referred to as the forward purchasers) with respect to 7,047,958  of its common shares. The forward purchasers borrowed from third parties and sold to the underwriters of the offering 7,047,958 common shares of Associated Estates in the aggregate. Pursuant to the terms of the forward sale agreements, and subject to its right to elect cash or net share settlement, Associated Estates intends to sell, upon physical settlement of such forward sale agreements, an aggregate of 7,047,958 of its common shares to the forward purchasers.

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